The Offense Defense, our Fund of Hedge Funds has now been live for 1 year.
During the period August 2023 – July 2024 Our Fund of Hedge Funds returned 15.34% in its first 12 month period. A strong outperformance of the JSE TOP 40 who returned a measly 3.14%.
An outperformance of the TOP 40 by + 12.2% – an indication of Signals ability to avoid the damage to portfolio returns during turbulent times.
A Fund made up of South Africa’s best Hedge Funds.
R1 million invested, 1 year ago into either Signal or the Top 40 would be worth:
- Signal : R1 153 400
- JSE TOP 40 : R1 031 400
- An out performance by Signal of : R122 000
Depicted below, The 12 month performance of Signal ( Red ) vs Top 40 ( blue )
The Signal Offense Defense offers an investor the opportunity to invest in a secure, mid- long term product with equity like exposure to returns but emphasis on only being subject to 1/3 of the market drawdowns and risk presented by equity portfolios.
Why are Hedge Funds fast becoming noticed in South Africa ?
The answer if one works in the investing world is simple to understand. ” A larger toolbox available to Fund managers, allows for vast more opportunities to generate alpha ” . ( We only allow for the most elite Fund managers to be in our portfolio ).
Simply described , Hedge Funds differ from equity funds in the opportunities presented to generate returns. Equity funds look to profit from taking long positions ( Buying a stock they believe to be undervalued/ or a stock that exhibits growth potential ) and then selling when they believe the stock has reached potential.
Hedge Funds on the other hand can do just the same by taking long positions and then some more ! Hedge Funds can also take short positions, whereby the opposite is applied. Managers may believe a stock is overvalued by the market and its intrinsic value is less. Managers may then take short positions to profit from too. In addition, Hedge funds can make use of controlled leverage in order to borrow capital and increase exposure to returns.
To better understand short positions and leverage , read following links below :
https://www.investopedia.com/terms/s/short.asp
https://www.investopedia.com/terms/l/leverage.asp
Our Fund of Hedge Funds is hosted on the trusted platforms of Allan Gray https://www.allangray.co.za and Glacier https://www.glacier.co.za.